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What happened

Shares of Omeros Corporation (NASDAQ:OMER), a small biopharma with a cataract surgery drug, popped 47.9% in November according to data from S&P Global Market Intelligence. Management's positive outlook for its commercial and clinical-stage pipeline pointed the stock price skyward.

OMER Chart

OMER data by YCharts.

So what 

About 24.5 million people have cataracts in the U.S., making it the country's leading cause of blindness. Corrective surgery is associated with several important benefits that improve patients' quality of life and reduce healthcare spending. Omeros Corporation's first commercialized product, Omidria, is playing an increasingly important role in cataract surgery operations.

The FDA first approved Omidria solution in 2014 to keep pupils open during cataract surgery and reduce inflammation. It's swiftly becoming a popular alternative to epinephrine, as third-quarter sales jumped 248% over the previous year period to $11.3 million.

While Omidria sales are rising, development costs associated with its ambitious clinical-stage pipeline continue to pull the company's bottom line into negative territory. Omidria's increased uptake suggests its cash burn rate could slow down, and a new $125 million credit facility will boost liquidity.

Now what

In the quarters ahead, a handful of studies outlining Omidria's significant benefits over epinephrine could help it continue its upward sales trajectory. Patients appreciate less post-operation pain, but cost-conscious providers will be especially interested in a significant reduction in complication rates associated with its use.

If Omidria sales continue to soar, Omeros could be able to launch its lead candidate, OMS721 for treatment of kidney vessel obstruction, without too many trips to the equity tap. Following the advice of European regulators, the company is running the same single-arm trial to support applications in the U.S. and EU for treatment of atypical hemolytic uremic syndrome.

Further out, Omeros is aiming for accelerated approval of OMS271 for treatment of two more causes of kidney damage that lack effective treatment options. The drug significantly improved circulating levels of bio-markers associated with kidney damage in mid-stage studies with patients in this group. Investors will want to keep an eye open for whether or not the FDA will accept bio-marker data, or insist on long-term measurement of clinical outcomes such as percentages of patients eventually requiring dialysis. 

Beyond OMS271, Omeros has three more clinical-stage candidates. If it sees further success with Omidria, its lead candidate could be just the beginning of a long climb upwards from a modest market cap of just $452 million at recent prices.

Cory Renauer has no position in any stocks mentioned. You can follow Cory on Twitter @coryrenauer or LinkedIn for more investing insight.

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